Disadvantages and Benefits of White Label Software In An Overview

Below we list the advantages and disadvantages of white label software. How nice is it if you can sell other people's software as if it were your own?

Most of the time, you can customize the product to suit the needs of your customers and then sell it them. This is advantageous because it allows you to save on development costs and attract more customers. Or does this also entail risks? Nevertheless, there are more reasons why you should or should not opt for white label software.



What are the benefits of selling white labeled software as a reseller?

First, let's look at the benefits of reselling white label software to retailers. We can name 10 important reasons.

1. Save development and maintenance costs
2. Offer your own brand experience
3. Accelerate your time to market
4. The pleasure of choice
5. Less risk (take advantage of expert work)
6. Sell additional services
7. Increase loyalty of current customers
8. Bind new customers to your business
9. Faster innovation possibilities
10. More budget for your core business



1. Save development and maintenance costs

White label software is a great opportunity for small and medium-sized companies to save development and maintenance costs. You may not have the resources available on your own to develop and maintain the software in-house. Therefore, the expert work is done by the original developer, so you don’t have to spend time and money on hiring developers or maintenance staff. So the general functions have already been developed for you and are also updated.

This is especially interesting if you have a relatively small niche market. You as a reseller benefit from this because you are able to provide the same software that larger companies offer, but at an affordable price. Furthermore, you can focus more on the marketing and less on the development.



2. Offer your own brand experience

With our white label software you make it possible to sell POS software under your own brand name and with your own logo on it. This enhances the experience your customers have with your company. For this it is also important if you can change the user interface, so you can make it completely your own. In this way you can bind customers to your company. Every day they use the software they see your logo and are indirectly in contact with your business.

An additional advantage is that you are less like a competitor if you can adjust the layout. Flexibility in styling is therefore very important and one of the biggest reasons why companies choose white label software.

3. Accelerate your time to market

Where white label software was first widely used for own use by large companies, it is increasingly being used by (smaller) resellers. Because a big advantage of white label software is that you can quickly and easily launch a new product or service. It is sometimes a matter of creating an account and starting sales.



This allows you to quickly test what your customers want and need. As a result, you quickly know whether the product is the right solution without having to make a large investment in advance. In this way you increase the speed in your organization.

4. The pleasure of choice

Another benefit of reselling software as a reseller is that you can get access to more products than you would if you were developing it yourself. You'll also be able to offer your customers a wider selection of products to choose from. This way you can not only offer a solution faster, but also combine more different products into a better solution. As an independent expert you get the opportunity to offer customers more.

5. Less risk is another advantage of white label software

Besides the above reasons, risk reduction is an important pro of white label software. If you develop software yourself, you are often months further before you can offer a good product. So in this way you reduce the risk of building and investing in something that customers do not want. In addition, you can also more easily sell other products if the solution is no longer satisfactory.

6. Sell additional services

In addition to the white label software, you can provide additional services to your clients to help them grow their business. Think about, reselling hardware, implementation, customization, support and marketing. In this way white label software can be a great way to help your business grow. It can free up your time and allow you to focus on what you do best, while still getting recurring income. Because white label software generally costs less than traditional commercial products. This is due to the fact that you are working with a pre-made product.

7. Advantage to increase loyalty of current customers

You may already be serving several customers. For example, companies that purchase hardware from you or that call you in case of a problem. Offering software services gives you the advantage that you can send an invoice every month. This gives more certainty about your future income. Moreover, customers are attached to you as long as they use the service. Therefore, they are more likely to purchase additional services from you.

8. Bind new customers to your business

If you offer white label software, you can probably reach a new group of customers. For example, retailers who would like to use your website builder or who want to optimize stock management. In those cases, new businesses can use your solution. This advantage gives you more opportunities to expand your business and make it future-proof.

There are many ways to bind new customers to your business, but one of the most effective is to help them get started with your product. The best way to do this is by providing a clear and concise tutorial on how to use it. People are more likely to come back if they find the experience satisfying. They will also be more likely to share their positive experience with friends and family, which can result in new customers for your company.

9. Faster innovation possibilities

In addition to a fast time to market, you also have access to more innovative power. If you develop yourself, you often continue to build on (older) architecture. As a result, new innovations often cannot be implemented immediately. By using other people's software, you can switch between parties faster. A good example is the white label PIM system. This is not easy to build in by large suppliers, while it is the future for retail to save costs.

10. More budget for your core business

Last but not least, the big advantage of white label software is that you can still focus on your core business. No distractions from development, debugging and building updates. You can fully focus on providing value to your customers. That is the most important thing with which you ultimately earn money.



What are the disadvantages of being a white label software reseller

In this section, we will discuss the disadvantages of being a white label software reseller. Typically, when a company becomes a white-label software reseller, they are given access to the software and can sell it to their clients. However, there are some disadvantages that come with this type of business model. 

• Pay licensing upfront
  
• Less control on product direction
  
• No intellectual property rights
  
• Not completely a unique brand



1. Pay licensing upfront

For one thing, the resellers have to pay for the licenses upfront even if they don't make any sales. This means that in order for them to break even on their investment, they need to sell at least one license per year. So you do incur costs when you start the project, despite the fact that these are a lot lower than developing software yourself. 

2. Less control on product direction

As a reseller you have less control over how the software is marketed or distributed. You are also not able to provide input on which features are added or removed from the product. This lack of control can be seen as a disadvantage for resellers because they cannot do anything about changes made by the software company and this can lead to less sales for them. Of course they always want to keep you happy, but you are not 100% in control and can’t reap all benefits.

Also, there may be compatibility issues with other products in the future. You do not have direct influence on this and you cannot solve it for your customer. The problem may be bigger for you than for the supplier of the software.

3. No intellectual property rights

Another disadvantage of white label software is that resellers don't own the intellectual property rights for the products they're selling. Some companies find it difficult to compete with the big corporations because they don't have enough resources to create their own products. They might not have an in-house development team or a marketing department. In these cases, they turn to other companies for help. 

In a sense you are building your own business and income, but in the end you do not own the software. That does not matter if you mainly provide services, but it can be difficult if you do not provide added value.

4. Not completely a unique brand

If you are a reseller, it is possible that someone else offers exactly the same product. This can lead to competition and little distinctiveness of the product. Of course a market is huge, but it is important to focus on the extra value you can offer in addition to the white label software solution.

Therefore, an important point that can overcome this drawback is that you have a lot of flexibility to customize the user interface. This way you can make it completely your own product. That is why it is possible to customize 80% of the frontend with Retailgear. You do need a developer or technical knowledge for this.



Conclusion: White label VS own development

In conclusion, white label is an excellent option for companies that want to save time and money. However, they need to make sure that they are working with a reputable company that understands the needs of their business. In addition, it is important that you do not become completely dependent on the supplied software. Always see it as a good revenue model next to your core business. Otherwise you let someone else determine the future of your company. This can of course turn out well, but it can also have negative consequences.